Service tax - reverse charge on manpower supply
This query is : Resolved
15 January 2019
XYZ (Manufacturer) is procuring material and giving it to a outside contractor for carrying out various fabrication, repair and maintenance jobs within the factory premises. The contractor is charging labour charges bill for the same on lumpsum basis depending upon the nature of work and not on man hour basis but not charging service tax being within the threshold exemption. EA-2000 audit team is demanding service tax from XYZ under reverse charge under ‘Manpower supply’ for the period 14-15, 15-16 and 16-17. Is the demand sustainable under the service tax provisions?
CA R SEETHARAMAN
(Expert)
16 January 2019
Service tax not applicable on labor charges on nature of work.
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